The International Council of Mining and Metals reported that mining provides the building blocks for human development. The supply of metal and mineral products has underpinned human endeavor through millennia and will continue to play its role in meeting society’s needs. The need will remain strong, so satisfying demand requires finding and developing new mines, even as resource use becomes more efficient and recycling systems ramp up. Fortunately the geological supply of metals within the Earth remains robust and new technologies will help bring new deposits on stream. But these will increasingly be located in more remote regions, raising production and investment costs.
In this 2012 edition of the Mining’s Contribution series, we discuss the key trends that mark today’s mining and metals industry and, without attempting to predict the future, consider the where, the what, the who and the how of the mining industry today and as it goes forward into the future. In spite of recent volatility and weakness, in the medium to long term, metal prices are likely to remain at a high level compared to the situation in 1980s, 1990s and the early 2000s. With rapidly growing demand and long response times to bring new mines on line, a gap has developed between demand and supply which has pushed prices up dramatically. But while there is upward pressure on prices, costs of production are also on the rise due to the following factors:
• as high grade deposits close to markets are mined out, more remote mines become economically viable with associated higher costs of the full range of support services including energy, transport, water supply, and labor,
• ore grades are decreasing as richer deposits are mined out,
• shallow deposits are depleted and are replaced by deeper lying deposits with higher extraction costs,
• deposits with simple mineralogy are being superseded by those with complex ores that are more difficult to process,
• society’s expectation that mining operations meet more exacting environmental, social and cultural standards of performance, and
• increasing demands for new capital, stemming from the need for new processes, equipment and technology, as well as better trained staff necessary to operate modern mines.
Despite cyclical boom and slump, the global mining industry has managed to meet the challenges of variations in demand and serve as the foundation for increasing material standards of living for millions of people. For the future, the challenge of anticipating and meeting the increasing demand for mined products will continue as the industry evolves in step with a changing operating environment.
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